Friday, September 22, 2017

Inflation cools down to 2.3 per cent

Inflation cooled down to 13-year low of 2.3 per cent in the first month of the current fiscal year, as food prices dropped and non-food prices went up moderately.
Consumer prices had last increased at this pace in July 2004, according to the central bank. "At that time, inflation had stood at 2 per cent."
The higher base price of the previous fiscal year contributed to the moderation of inflation in the current fiscal year's first month,” revealed the latest Macroeconomic Report of the central bank. "Inflation stood at 8.6 per cent in the same month a year ago."
Consumer prices decelerated after prices of food and beverages, which make a contribution of 43.9 per cent to the consumer basket, dropped by 1 per cent, the report reads, adding that prices of pulses and legumes had dropped by a whopping 23.3 per cent, while vegetables had become cheaper by 11.7 per cent. "These items make a contribution of 7.4 per cent to the consumer basket."
Likewise, prices of spices had also gone down by 3.5 per cent, while fruit prices had decline by 1.4 per cent. Fall in prices of these food products were able to offset 8.3 per cent jump seen in prices of alcoholic beverages and 5.3 per cent hike in prices of sugar and products made out of sugar, the report added.
"The torrential rains did cause losses of stock and hit agricultural infrastructure in most of the districts in the Tarai,” the report revealed, adding that timely onset of monsoon, normal rainfall in subsequent period, improved supply of agricultural inputs and steps taken by the government are likely to offset the output loss initially assumed.
Likewise, non-food inflation also decelerated to 4.9 per cent from 8.1 per cent a year ago, due to lower growth rate in prices of clothes, footwear, furniture and household equipment. Hike in housing and utilities costs was not as intense in the first month, which helped non-food inflation to moderate, the report adds. "Prices of clothes and footwear went up by 6.4 per cent as against 11.2 per cent in the same month a year ago."
In the first month, housing and utilities costs rose by 6.3 per cent as against 9.7 per cent a year ago, while prices of furniture and household equipment increased by 4.1 per cent against 8 per cent in the same month a year ago.